With the initial phases of land preparation already completed across multiple villages, this Hainan project is anticipated to begin contributing substantially to Zixin's bottom line by FY2027 ending March 2027 to eventually double the company's overall profitability, state SAC analysts Matthias Chan and Liu Maorong.
In addition, Zixin has set up a trading entity sited within the Hainan Free Trade Port.
By doing so, Zixin can tap "highly advantageous" zero tariff policies, significantly reducing tax liabilities on the import of raw materials and the export of processed goods.
From largely domestic sales thus far, Zixin is actively developing new markets such as Indonesia and the US.
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Meanwhile, at its home base of Liancheng, the company is prepping the first phase of its new 86,000-square-metre high tech manufacturing facility which can eventually increase processing capacity by 2.6 times to 35,000 tonnes per year.
This capacity is specifically dedicated to the production of advanced functional ingredients, and not lower value sweet potato-based snacks.
"By targeting the lucrative, high-barrier business-to-business (B2B) functional food, bakery, and nutraceutical markets, Zixin is structurally elevating its gross profit margins far beyond the natural limitations of the competitive traditional consumer snack food sector," note Chan and Liu.
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Zixin has been developing an animal feedstock business, which draws upon sweet potato skin and other ingredients left over from the processing of foodstuffs. This means Zixin is able to build up a circular economy.
It has secured key supply agreements and is well poised to secure additional orders for the animal feed.
In its most recent FY2026 earnings jumped 105.5% y-o-y to RMB16.1 million in 1HFY2026 ended Sept 2025, on the back of a 40.8% gain in revenue to RMB220.6 million.
As a rough gauge, Chan and Liu point out that Zixin is now trading at a P/E of 5.3x. In contrast, the mean valuation of the Catalist board is 15.8x.
Zixin Group shares last traded at 3 cents, down 25% year to date.
